The Quiet Way Serbia Keeps Winning Foreign Factories

While Spain looked elsewhere, German and Italian companies quietly built a manufacturing hub in Serbia. Here's how they did it — and why the window is still open.

Earlier this month, in a small industrial town called Kać, outside Novi Sad, a German-owned auto parts plant did something unremarkable on paper and telling in practice: it decided to invest more than it originally planned. No ribbon-cutting, no headline abroad. Just a factory that came to make components for the world's car brands, found the conditions better than expected, and quietly wrote a bigger check.

That's the pattern with Serbia, and it's also why almost nobody in Spain has noticed it. Foreign investment there doesn't announce itself with a splashy groundbreaking ceremony covered by international press. It shows up as a plant expanding its floor space, a software team growing from ten people to forty, a supplier signing a five-year contract nobody outside the industry ever hears about. Multiply that by a few hundred quiet decisions a year, and you get a country that pulled in €5.2 billion in foreign investment in 2024 alone — a record, and one that kept climbing into this year.

Who's already there, and who isn't

Walk through the list of companies with real operations in Serbia and it reads like a directory of German and Italian industry: automotive suppliers, machinery firms, furniture manufacturers. FIAT has built cars in the city of Kragujevac since 2008, on a site with roots going back to before the Second World War. Around that plant, a whole ecosystem of component makers has grown — the unglamorous parts of a car that somebody still has to build.

Spain is largely absent from that list. Not because Serbia is closed to Spanish companies — it isn't, and nothing in the legal or tax framework treats them differently — but because nobody's really looked. Spanish business has spent the last two decades focused on Latin America, Morocco, Portugal. Serbia never made it onto the shortlist, mostly because nobody put it there.

Why the ones who did look, stayed

Ask a foreign CFO who's actually built something in Serbia why they stayed, and the answer is rarely one big thing. It's a stack of smaller ones. Salaries for skilled engineers run a fraction of what the same role costs in Germany. A company can license software it develops there and pay tax on that income at 3%, not 15%. Setting up a company doesn't require ever visiting the country — a local lawyer with power of attorney can file the paperwork, and registration is done in about a week.

Then there's geography, which does more quiet work than people give it credit for. A truck leaving a Serbian warehouse can reach most of Europe within a day. And because Serbia sits outside the EU, it's been free to sign trade deals the EU hasn't — with China among them — so a factory built there can, in some cases, ship to both Brussels and Beijing without paying the tariffs a company inside the EU would owe on the same route.

Food tells a version of the same story that Spain, of all countries, should recognize. Serbian raspberry growers now export more frozen raspberries than any country on earth, almost all of it shipped abroad rather than sold at home. It's not a coincidence — it's a country that's spent years building the roads, cold-storage chains, and export relationships that make that possible.

What this isn't

None of this makes Serbia a shortcut, and it's worth saying plainly: it's not in the EU, so the rules a Spanish company already knows by heart don't automatically apply. Wages are low by Western European standards, but they've been rising for years and shouldn't be treated as fixed. And it's a small country — 6.6 million people — so the appeal has almost nothing to do with selling to Serbians and almost everything to do with building something there to sell to everyone else.

The opening, such as it is

Here's the actual opportunity, stripped of the sales pitch: Serbia has spent two decades building exactly the kind of environment that German and Italian manufacturers were looking for, and it worked — they came, and they stayed, and lately they've been investing more than they originally planned. Spain hasn't had that conversation yet. Not because the door is closed. Because almost nobody's knocked.

That factory in Kać isn't going to change that by itself. But it's a small, useful reminder that somewhere between Belgrade and Novi Sad, foreign money keeps finding reasons to stay a little longer than it planned to — and Spanish money, so far, has mostly missed the invitation.